It’s been the focal point of the Labour government’s start to life in office. Chancellor Rachel Reeves, alongside Prime Minister Keir Starmer and other party colleagues, have lambasted the previous administration for their alleged ‘reckless spending’. And, it seems, the receipts were kept.
Ahead of Labour’s budget this week, doom and gloom has surrounded some of the forecasts. Britain is braced for increases on employers’ National Insurance contributions, and further cost-cutting measures are expected to be enforced.
Earlier this year, Starmer warned that ‘unpopular choices’ would have to be made in order to get the country going again. After 14 years of Tory rule, public services have been decimated, and the state is looking for ways to raise capital without taxing ‘working people’.
That definition, however, is causing controversy in itself. Shareholders and those who earn passive income through property are also rumoured to be in the firing line for the 2024 Budget. Income tax, however, is likely to remain untouched this time around.
Labour’s commitment to a strict fiscal policy has been blamed on a major hole in public finances, left behind by Rishi Sunak and the last Conservative government. Labour officials estimate that upwards of £22 billion was left unaccounted for before the transition of power.
Critics remain sceptical about this figure, and former Chancellor Jeremy Hunt has outright denied these claims. However, Rachel Reeves appears to have an impeccable sense of timing. Just 24 hours before the Budget is delivered, a summary of the ‘black hole’ will be delivered.
The letter, which will be produced by the Office for Budget Responsibility (OBR), will outline exactly how – and why – the incoming administration was left with an enormous and unforeseen financial burden. According to one source, Sunak and Hunt won’t be able to deny responsibility…
